I know it is doable, but is it right? One of the LFS's I went to said I could start with a small tang, and just trade him in when he outgrows the tank.
I know they need room to swim, would a 36" long tank provide enough room for one?

I wouldn't suggest it. That's barely enough room for the tang to swim freely, so as soon as it grows a little, its already going to be crowded. Also, fish don't grow as much when they are in a small tank, which also may shorten their life span. In other words, If you want your tang to live a nice long life, try a 75 Gallon Tank._________________370 Gallon Marine FO
20 Gallon Hardy Inverts
55 Gallon Hardy Inverts
10 Gallon Planted
1 Chinchilla 1 German Shepherd
Assorted Reptile Species